Bernhard Schreier has seen five economic crises since he joined Heidelberger Druckmaschinen AG in 1975, the first of them being the one brought on by the oil embargo that threw businesses around the world into a tailspin. He also recalls the stock market meltdown that the printing industry was only starting to recover from on September 11, 2001, before the awful events of that day threw it and the rest of the U.S. economy back into a state of shock.
But even the crisis triggered by the 9-11 tragedy didn’t lead to a downturn as steep or as prolonged as the one in which the industry remains mired, said Schreier, who has a painfully clear overview of the situation as chairman of Heidelberg’s board of management. Speaking at a media briefing on the opening day of Print 09—exactly eight years to the day after the World Trade Center attacks shut down Print 01—Schreier said that despite some indications of progress, the industry’s return to pre-recession business levels probably will not be a near-term proposition or even necessarily a sure thing.
“Will it come back to normal?” he asked, answering the question with another: “What is normal?”
Schreier’s somber realism was an appropriate reminder that if the industry really wants to regain its footing and its self-confidence at Print 09, it will have to look carefully. It will also have to come to Chicago’s McCormick Place in much greater numbers than it did yesterday, when the meager visitor traffic was more evocative of the end of a trade show than the beginning of one.
No one can predict what the attendance figures will be by the time Print 09 officially closes next Wednesday, but if the crowds fail to materialize, the loss of opportunity will have been great. Although Print 09 isn’t much larger than Graph Expo 08 in terms of numbers of exhibitors, it’s a comprehensive, well organized printing trade show with plenty to see, evaluate, and purchase. There’s every reason for wishing that printers in all segments of the industry were here, and none for thinking that Print 09—given healthy attendance—doesn’t have all that it takes to be a success.
But, show-opening presentations by Heidelberg and two other leading press manufacturers, Komori and manroland, were alike in implying that the best way to profit from attending Print 09 will be to apply its lessons and resources to the new realities of the printing business—as uncomfortable as some of those realities can be. Primary among them is that ultra-efficient production is not an option but a mandate for any printing business that wants a prayer of surviving an economic slump that shows no signs of a quick or an imminent turnaround.
Four printers empanelled by Komori spoke of transforming their operations with new equipment and technologies that took them to new heights of productivity—in one case, by installing two Komori presses that are now handling the volume that nine machines once produced. Another of the compnaies routinely achieves 16-minute makereadies in press runs averaging 1,700 copies with less than one-third of the waste it used to generate.
Why the steely-eyed focus on production efficiency? One of the panelists explained that because print buyers are as relentlessly committed to “saving nickels” as printers ought to be to not wasting them, “operational excellence” is the only way to safeguard the profit margins that wily buyers will try to erode. “At the end of the day,” said another of the printers, “the lowest-cost producer wins”—and overcomes the cutthroat pricing that “desperate” competitors resort to when their own inefficiencies drive them to that type of behavior.
“Anyone who is not trying to drive cost out of the system is not going to survive,” another panelist said.
If this is correct, and if Vince Lapinski’s view of the industry’s pace of technology adoption is also correct, there may not be all that many survivors. “Most facilities are not running anywhere near as efficient as the technology is capable of,” he said, adding that some of manroland’s customers are exceptions to that rule. Lapinski, CEO of manroland’s North American business, urged all printers to make the necessary investments in high-efficiency production, acknowledging that limited access to capital is making it difficult for many to do so.
At the Heidelberg booth, which has been set up as a centrally controlled print shop with 12 working pieces of equipment, Schreier observed that the U.S. has a relatively old installed base of equipment that can’t achieve the waste reductions and other efficiencies that printers now realize they must achieve. As printers starting moving in that direction, he said, “this crisis appears to be waning.”
As many in the industry know, Heidelberg and manroland are rumored to be moving in the direction of a corporate merger. Neither Schreier nor Lapinski would comment on what negotiations might be under way, and both said that their customers and their employees were remaining calm amidst the speculation.
Lapinski, however, did say manroland believes that some form of consolidation among equipment manufacturers probably will occur.